Property Managers as Brokers

4 Replies

Along the lines of David Greene’s advice I’ve been putting together what I hope to be a “Big 4” team and I’ve found as I ask for input on potential single family deals from a prospective property manager that the manager is a licensed real estate agent and interested in representing me as the buyer’s broker. She apparently splits time as manager/broker about 60/40. 

I could see how knowledge of the market as a property manager could be a good skill in negotiating an acquisition but I’m a little hesitant to have a jack of all trades wear both hats and try to do both well. 

Is this at all common in single family investing outside the turnkey business model? Is my concern much ado about nothing?

Originally posted by @Brian Burke :

Along the lines of David Greene’s advice I’ve been putting together what I hope to be a “Big 4” team and I’ve found as I ask for input on potential single family deals from a prospective property manager that the manager is a licensed real estate agent and interested in representing me as the buyer’s broker. She apparently splits time as manager/broker about 60/40. 

I could see how knowledge of the market as a property manager could be a good skill in negotiating an acquisition but I’m a little hesitant to have a jack of all trades wear both hats and try to do both well. 

Is this at all common in single family investing outside the turnkey business model? Is my concern much ado about nothing?

 You have to be licensed to do PM. PM is a high volume low profit product to go along with but/sell brokerage services. Most that offer PM only do so to support more sales.

@Brian Burke This might not directly help you but I use my property manager as my agent for all of my purchases, offers, etc. where I invest.  I know it's not exactly a large sample size and I used her as a PM before working through her on purchases but it does have several advantages:

1.) She knows the kinds of property that I like and can visit a property to see how it does/doesn't match up.

2.) She knows how I like my properties kept up/maintained and can provide perspective on maintenance costs.

3.) She knows she'll have me nagging her if units are vacant so when she says "I think they should rent for $____/month" she has ownership of that number.

4.) She knows when other property owners are thinking about selling and can make me aware of off-market properties.

5.) If there's small-scale rehab (handyman-ish stuff) she can provide those estimates as...well...it will be her handyman who is doing the work.

6.) She can make the distinction between: "I will manage that for you" and "I would *like* to manage that for you" (it's a BIG distinction).

And the reality is similar to what @James Wise mentions, PM isn't exactly a high margin business.  If they aren't buying/selling themselves then they're closely tied to someone that is.

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